On-demand shipping startup Shyp is closing all of its operations.
In a blog post, Kevin Gibbon, the company’s chief executive and co-founder, admitted that he had devised a “wrong strategy” and had been guilty of not having listened to other people’s advice, the Hong Kong Economic Journal reports.
Founded in 2014, Shyp aimed to “make shipping items anywhere around the world” easier with the aid of a smartphone, saving time for the consumer who otherwise would have to wait in line at the post office.
The startup had attracted massive customers during its early years. And with this “initial explosive growth” in demand, media started calling it “the Uber for shipping”.
Shyp was valued at US$275 million in 2015, having raised US$62 million.
However, it faced the same challenge encountered by most companies in the sharing economy: how to harvest profit.
Gibbon admitted he did not listen to the advice of tapping into the corporate market. Instead, he focused on the consumer market, aiming to widen its service coverage. “It clouded my judgment,” he said.
Gibbon considered not developing the corporate market “so sooner” his “biggest regret”.
Shyp began to tap into the business-to-business market by teaming up with eBay in 2016. The startup produced an impressive performance on unit profitability and boosted revenue per transaction by 150 percent.
The company then “reallocated resources” and shifted its focus to small businesses, which proved more profitable. However, it held on to unprofitable segments of its business, which Gibbon now called a mistake.
In the summer of 2017, the company suspended operations in all its markets except San Francisco, its largest and most profitable market.
In the meantime, the company shrank its business focus to business customers and closed other parts of its business that were not generating revenue.
All these huge reforms failed to salvage the company, however. “Our earlier mistakes had left us with too little runway and insufficient resources to continue pursuing the new direction,” Gibbon said.
With its failure to receive another round of funding, Shyp was left but with one recourse.
Gibbon did not disclose how many employees were affected by the company’s closure.
He said “sorry” and thanked his “world-class” team many times.
“I am grateful and humbled to have met and worked with you all.”
He concluded his post on an optimistic note, suggesting he may have new plans: “I can’t wait for you to see what we do next.”
This article appeared in the Hong Kong Economic Journal on March 29
Translation by Jonathan Chong
[Chinese version 中文版]
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